Commenting on its revised bid, a CERCG spokesman said the company believed “73¢ is a very full and fair offer”.

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A CERCG spokesman said it had been in talks with AWE since October and was encouraged to make the takeover proposal by AWE shareholders.

“Shareholders were upset that they weren’t able to consider the last two approaches [from Senex and Lone Star Japan Acquisitions],” the spokesman said.

“AWE has consistently failed to deliver acceptable shareholder returns,” CERCG said in a company statement.

CERCG said it raised the bid from 71¢ to 73¢ due to an expected increase in reserves at AWE's Waitsia gas project in Western Australia above 500 petajoules.

It also called on AWE to make an official statement on these reserve levels.

In making its latest offer, CERCG laid out what it believes are the many challenges ahead if AWE shareholders do not accept its revised bid.

However, it has not dismissed the potential of AWE completely.

“Despite AWE’s significant erosion of shareholder value and underperformance to peers, CERCG Australia acknowledges that the Waitsia gas field, and its increasing proved and probable reserves and future development, has the potential to return value to AWE shareholders in the longer term,” it said.

“It is for this reason that CERCG Australia is prepared to pay such a substantial premium for AWE.”

RBC Capital Markets analyst Ben Wilson said the new bid was still below AWE’s real valuation.

“The 73¢ per share is a small lift to the first offer of 71¢ per share and we still think bid pricing is too low and is below the 90¢ per share price target we have for AWE,” Mr Wilson said.

The deal remains contingent on a number of conditions including a 50 per cent minimum shareholder acceptance, Foreign Investment Review Board (FIRB) approval and no new gas sales agreements being entered into for Waitsia below $5.50 per gigajoule in real 2020 terms.

The Chinese state-owned firm said it had already progressed its approvals process and applied to FIRB.

CERCG said if it were to acquire AWE, the focus would be on supplying the domestic market, namely WA mines, remote communities and potentially the east coast, depending on logistics issues such as existing pipelines and transport.

AWE's board advised shareholders to take no action on the offer until it made a formal recommendation.

AWE’s share price rose 10.6 per cent following the announcement to close at 73¢.